In cancelling its agency agreement with Bluefin, Hiscox questioned the AXA-owned broker’s independence and impartiality. Will other insurers follow suit against the insurer-owned broker model?
The news that Hiscox has cancelled its agency with Bluefin on grounds of impartiality certainly caused waves in the market, judging by the record number of readers that are reading the story online.
Bluefin chief executive Stuart Reid has strongly denied the impartiality, but the story became this website’s most-read article of the week almost instantly – though it had stiff competition from the story that a lack of cover delayed Freddie Starr’s entrance into the most recent series of I’m A Celebrity, Get Me Out Of Here!
Not a unique problem
Accusations of impartiality are nothing new. Any broker that is owned by an insurer will have dealt with these claims at some point, and there are certainly enough of these brokers around.
Covea owns Swinton, Zurich owns Endsleigh, Groupama owns Carole Nash, while Ageas UK owns Ageas Insurance Solutions, Kwik-Fit and RIAS, and the list goes on.
The same type of accusations are often levelled at broker networks ultimately owned by insurers, brokers or MGAs. However, the moans tend to bubble away under the surface without any party doing anything about it.
The interest in this story has come because an insurer pulling an agency like this is a watershed moment, and perhaps many brokers are wondering if any other insurers will follow suit.
FSA hard line continues
The FSA has doled out a £70,000 fine to fraudulent insurance broker John Folan, plus the recovery of an additional £125,117 that he got through commissions. This will add to the £48.7m of fines the FSA has already handed out this year.
The total value of fines doled out in the last three years has dwarfed previous years, and shows an increased willingness on the part of the FSA to root out and punish fraud. With the authority soon to be superseded by the PRA and FCA, it’s certainly not going down without a fight.
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